(CNS): The NCFC has parliamentary support to begin establishing a Sovereign Wealth Fund. Premier André Ebanks officially laid the motion in parliament earlier this month to comply with House rules, but he made it clear that the work on this project remains in the hands of government backbench MP Julie Hunter (WBW).
Hunter made a compelling case for the fund, which she said would help meet future needs, reduce pressure on public finances and give future governments greater room to respond when difficult times come.
The passage of the motion means that work will now begin in earnest on the project. At this point, none of the main questions has been answered, though Hunter said this will not be a fund that any government can dip into whenever it wants.
“It must be governed by clear rules, rules that determine who has authority over the fund, how its assets are invested, and the very limited circumstances in which those assets can be accessed,” she said. Who will control it, who can withdraw from it and when have all yet to be determined. But she said that these are the critical questions.
“Protection is the whole point. If the money were simply to be used whenever a government faces a difficult year, then sooner or later it will be used,” Hunter told her colleagues.
“There will always be a reason that sounds compelling at the time. The real test of this fund is whether the rules can withstand pressure, not just from future governments, but from us sitting here today. If we cannot trust the rules when the money is most tempting to use, then the structure is not strong enough.”
She explained that the motion will trigger the necessary work, and she was asking parliament to agree to the principle and give authority for the work to begin.
“Let us establish the right framework, put the right safeguards in place, and do the work properly,” she said. “Then, when the time comes, we can stand behind the decisions we have made with absolute confidence.” The next step will be to establish a working group with the appropriate expertise to undertake the detailed work.
“It will consider the purpose of the fund, how it should be funded, how it should be governed, the degree of independence that governance should have, and the legal structure it should take. It will examine the investment framework — what the fund may invest in, what it may not invest in, and critically, the circumstances and rules around which the funds could ever be withdrawn.
“That work will then come back to government in the form of recommendations and proposals. Government will consider them and bring the necessary legislation to this chamber,” Hunter told parliament, noting that we can’t predict exactly what the future will bring, but we can decide what we will do with the good years.
“If we are good stewards of our blessings in times of plenty, if we have the discipline to save and invest for the future, then when difficult times come, we will have something to fall back on. That is the wisdom behind a sovereign wealth fund: save in the good years, prepare for the difficult ones, and protect the future of our people,” she added.
The West Bay representative and former banker said many of today’s social housing and social development problems can be traced in part to the lack of long‑term savings for the country.
“This is not a failure of our people; it is a failure to have built, over time, the habit and the institutions that allow us to save during periods of prosperity and draw upon those savings when circumstances change. That is why I believe a sovereign wealth fund is so very important.
“If this fund does nothing more than establish a culture of savings and long‑term financial planning at the national level, it will have served a worthwhile purpose. When revenues are strong and times are good, we should not simply ask how much more we can spend today. We should ask what we can set aside for tomorrow,” she said.
“We are not creating this fund for the government of today. We are creating it for the country of tomorrow. And that means we have to be disciplined enough to put money aside, protect it, and leave it there until the rules say it is right to use it,” Hunter added.
The fund was welcomed across the parliament by all members. The premier told his colleagues that there was enough wealth in Cayman that “we can put some aside for the benefit of the people”. He pointed out that funds had been established before, such as the Environmental Protection Fund.
But what Cayman has lacked is an “overarching umbrella fund”. He said no one should doubt that Cayman has the people to do this, given that it manages more than 31,000 investment funds registered with CIMA.
He also spoke about the potential for new revenue streams that the government has never considered before, because there are “actual measures, potential measures that have not been touched yet, where we don’t have to worry about the current revenue streams,” he added, though he did not indicate where they might come from.
See the motion here and watch the debate on CIGTV below: